EROAD (ERD) H1 2026 earnings summary

Executive summary

• Revenue for H1 FY26 grew 3.3% year-over-year to $99.1 million, with ARR up 6.9% to $178.1 million and normalized free cash flow at $16.7 million after excluding one-off 4G upgrade costs.

• Free cash flow improved to $6.2 million, with future levels expected to normalize higher as 4G upgrade costs conclude.

• Strategic focus is shifting toward Australia and New Zealand, leveraging regulatory changes in NZ to expand eRUC services and capitalize on ANZ growth.

• A $134.7 million non-cash impairment in North America, driven by competitive pressures, economic conditions, and a large customer non-renewal, resulted in a net loss.

• Liquidity remains strong at over $62 million, supporting investment flexibility and growth initiatives.

Financial highlights

• Normalized EBIT was $2.5 million, down from $4.7 million, while reported EBIT was -$133.9 million due to the North American impairment.

• EBITDA was $28.7 million, slightly down year-over-year, reflecting higher platform and recruitment costs.

• Subscription revenue increased 5.4% year-over-year, with total revenue up 3.3%.

• Operating costs rose due to higher SaaS costs, recruitment, and lower R&D capitalization.

• Cash from operations increased to $25.7 million, up $8.4 million from the prior year.

Outlook and guidance

• FY26 guidance reaffirmed: revenue of $197–$203 million, ARR of $175–$183 million, and normalized free cash flow margin of 5–8%.

• Growth investment prioritized in Australia and New Zealand due to stronger near-term returns and policy momentum.

• Investor Day planned for March to detail product roadmap and long-term targets.